On July 10, 2013, new SEC Chair Mary Jo White held a vote on part of the JOBS Act, which is the legislation that legalized crowdfunding. This vote was just the first of many, but signals that the SEC has finally started moving on the issue of crowdfunding.
The immediate impact of this vote is that in about 60 days (i.e. approximately September 10, 2013), companies who want to use crowdfunding can begin offering their projects through an online equity crowdfunding platform. Beginning on that date, the companies can also advertise their offerings through social media, as long as the advertising leads back to the crowdfunding platform.
However, the SEC has not yet voted on the portion of the JOBS Act that would allow non-accredited investors to invest in crowdfunded projects. This means that for now, any investors in crowdfunded projects will still have to be accredited investors (above a certain verified net worth and income level). It is expected that the SEC will take action on this portion of the Act later this year.
For now, any companies interested in crowdfunding can register with an online crowdfunding platform. Keep in mind that it’s very important to research the platform in order to determine if it’s a reputable venture and if it will be a good fit for your business.
Stay tuned for updates!
For more information, see: http://www.sec.gov/news/press/2013/2013-124-item1.htm and http://www.forbes.com/sites/chancebarnett/2013/07/19/sec-finally-moves-on-equity-crowdfunding-phase-1/
Melissa Demorest is an attorney with Demorest Law Firm, PLLC. If you would like more information about crowdfunding, please contact Melissa.
